Cisco Systems, Digitas, ScanSoft

MichaelBaron

Wednesday stocks to watch

Autodesk slipped after hours as its projections for the first quarter and full year were below analyst estimates. The animation and design software firm also reported a lower fourth-quarter net income than a year ago as demand for its products fell. The company
ADSK, -2.35%
recorded a net income of $6.4 million, or 6 cents a share, compared with profits of $21.8 million, or 19 cents, in the year-ago period. Shares of Autodesk fell 69 cents to $12.60 after hours. See full story.

Hewlett-Packard
HPQ, -1.74%
on Tuesday reported a first-quarter net profit of $721 million, or 24 cents a share. Company sales of $17.9 billion missed analysts' estimates of $18.47 billion, but pro forma earnings of 29 cents a share topped the consensus estimate by a penny. During the same period last year, H-P posted a net profit of $484 million, or 25 cents a share, on revenue of $11.4 billion. See full story.

XM Satellite Radio
XMSR
is asking shareholder approval for an increase in the number of the company's authorized shares to 615 million from 240 million shares, according to a regulatory filing Tuesday. The increase in shares would allow the company to issue shares to General Motors
GM, -2.10%
as required by a financing plan between the companies. The Washington-based radio broadcasting company's shareholders will vote on the matter at its annual shareholder meeting on March 27, the filing said. Shares fell 2 cents to $4.74 in recent trading.

Tuesday advancers

Broadwing
BRW, -0.76%
jumped more than 16 percent after the Cincinnati firm agreed to sell the assets of its broadband business to privately held C III Communications for $129 million. The deal calls for C III to assume certain long-term operating liabilities of the business and continue offering the service to customers. Broadwing unit Cincinnati Bell will remain a customer of the broadband unit upon completion of the deal. See full story.

Coach
COH, +0.69%
added more than 7 percent after the company lifted its profit projections to 29 cents a share for its fiscal third quarter -- 4 cents ahead of Wall Street's average consensus -- the luxury retailer said late Monday. Chief Executive Lew Frankfort said comparable-store sales are expected to jump 10 percent ahead of last year's results, driven primarily by strength in full-price stores. He sees fiscal-year earnings of $915 million, or $1.46 a share, with the fourth quarter coming in at $205 million in sales and profits of 25 cents a share.

El Paso
EP, +0.00%
rose almost 10 percent after the company updated investors on the progress it has made on its operational and financial plan for 2003. The company agreed to sell natural gas assets to Chesapeake Energy
CHK, -3.00%
for $500 million, has obtained a new $1 billion financing commitment to retire its Trinity River preferred interest financing and has sold its European natural gas trading hook. The natural gas and pipeline services provider added that Southern Natural Gas and ANR Pipeline would commence offerings for $700 million in notes within a week. See full story.

Engineered Support
EASI
gained nearly 12 percent after the company reported first-quarter earnings from continuing operations of $8.4 million, or 50 cents per share, a nickel ahead of the average estimate of analysts polled by Thomson First Call. Revenue soared 33 percent in the latest three months to $121.7 million from $91.3 million in the same period a year earlier. The St. Louis-based military electronics firm also boosted its outlook for fiscal 2003 to earnings from continuing operations of between $35 million and $36 million, or $2 to $2.05 per share, on revenue ranging from $475 million to $485 million. It previously was calling for earnings of $1.91 per share on revenue of $460 million.

ScanSoft
SSFT, +0.00%
gained 6 percent after the Peabody, Mass., imaging and language technology firm reported fourth-quarter earnings before items of $6.7 million, or 9 cents per share, meeting the average estimate of analysts polled by Thomson First Call. Revenue jumped 53 percent in the latest three months to $28.4 million from $18.6 million in the same period a year earlier. Looking ahead, ScanSoft forecast earnings before items of 33 to 35 cents per share on revenue of between $135 million and $140 million in 2003. Wall Street's current consensus estimate for the year is for a profit of 34 cents per share.

Tuesday decliners

Atlantic Coast Airlines
ACAI
slumped almost 11 percent following an unfavorable contract decision by the judge overseeing bankrupt United Airlines'
UAL, -3.32%
restructuring. Atlantic Coast has a service agreement with UAL.

Audiovox
VOXX, +0.69%
shares fell 7 percent in after the Hauppage, N.Y., consumer electronics firm said it's currently unable to file its 10-K report with the Securities Exchange Commission because it's completing required disclosure. As a result, the company is rescheduling the reporting of its fourth-quarter and year-end results to before the opening bell on March 14. Audiovox plans to ask the SEC for an extension and file its 10-K on that date.

Blue Rhino
RINO, -9.09%
lost more than 11 percent after the Winston-Salem, N.C., propane cylinder exchange firm reported second-quarter earnings of $916,000, or 5 cents per share, reversing a year-ago loss of $732,000, or 6 cents per share. However, looking ahead, the company forecast earnings before items of 11 to 13 cents per share on revenue of between $55 million and $60 million for the third quarter. This forecast is short Wall Street's current consensus estimate for a profit of 21 cents per share in the April quarter.

Calgon Carbon
CCC, -4.38%
slid more than 5 percent after the company said that James Cederna has resigned as its chairman, president, and chief executive officer in order to pursue other career opportunities. Cederna, who also left the board, had served as CEO of the Pittsburgh-based air and water cleaning firm since April of 1999. The company named John Stanik acting president and CEO while it conducts a search for a successor. Stanik most recently served as a senior vice president of operations for America and Asia with the company.

Chesapeake Energy
CHK, -3.00%
gave back more nearly 5 percent after the company announced intentions to privately offer $200 million worth of convertible preferred stock and $300 million worth of new senior notes to qualified institutional investors. The natural gas producer plans to use the proceeds to finance its previously announced acquisition of natural gas properties from El Paso.

Credit Suisse
CSR, +2.50%
shares sank more than 7 percent after the company swung to a loss in 2002, and announced plans to lower its dividend payout and cut an estimated 1,250 jobs.

Crown Castle
CCI, +0.34%
lost more than 7 percent after the Houston-based wireless infrastructure firm said that it plans to release its fourth-quarter results after Wednesday's closing bell. Seven analysts polled by Thomson First Call are looking for a loss of 37 cents per share in the period on average. In addition, the company said that the quarterly dividend on its 12 3/4 percent senior exchangeable preferred stock will paid on March 17 to shareholders of record on March 1. Crown Castle plans to pay the dividend in preferred stock at a rate of 31.875 shares per 1,000 shares held.

CryoLife
CRY, -0.52%
fell almost 15 percent after the Atlanta tissue processing and medical device firm reported a fourth-quarter loss of $5.7 million, or 29 cents per share, down from its year-ago profit of $2 million, or 10 cents per share. The company's 2002 results were hurt by a Food and Drug Administration recall of certain processed tissue products. Revenue fell to $12.2 million in the latest three months from $22 million in the same period a year earlier. CryoLife also said that it's voluntarily suspending the use of its SynerGraft technology in the processing of allograft heart valves and vascular tissue until the regulatory status of its CryoValve-SG and CryoVein-SG products is resolved. Instead, it will use its traditional methods to process these tissues.

Digitas
DTAS
slid almost 21 percent. After Monday's closing bell, the Boston firm's board approved the self-tender offer to purchase up to 6.4 million common shares, or 10 percent of its outstanding stock, for $3.89 each. The company noted that one of its directors plan to sell a portion of his holdings in the offer. In addition, Hellman & Friedman Capital Partners, Digitas' majority shareholder, and its affiliates plan to sell shares in the tender offer, and to effect a distribution of 6 million Digitas common shares to partners and limited partners prior to Feb. 26. H&F is expected to own between 40 and 50 percent of Digitas' outstanding stock following these moves. Digitas also reiterated its first-quarter but said that it remains cautious about the full year due to continued market uncertainty.

Fleming
FLM, -0.43%
fell nearly 38 percent after the Dallas consumer package goods distribution firm updated investors on its restructuring plans and said that the Securities and Exchange Commission has moved to a formal inquiry of the company. Earlier in the session, the stock scraped a 52-week low of $2.20. See full story.

Overstock.com
OSTK, +3.24%
fell 18 percent after the Salt Lake City-based Web retailer cautioned investors that analyst estimates for its first-quarter results "may prove aggressive given the present uncertain business and retail environments." The company said that it remains comfortable with the range of Wall Street expectations for its performance in the full year. Two analysts polled by Thomson First Call are currently looking for breakeven results in the March quarter, and a profit of 42 cents per share for fiscal 2003.

Overture Services
OVER, +10.32%
tumbled more than 11 percent after the Pasadena, Calif., firm agreed to acquire the Web search unit of Norwegian company Fast Search & Transfer for $70 million in cash. In addition, the deal includes a performance-based cash incentive payment of up to $30 million over three years. The company expects the transaction to close by April. Overture estimates total dilution from this acquisition and AltaVista of 20 to 21 cents per share in 2003. It believes that, at a minimum, the acquisitions will be neutral to its results in 2004. Overture also updated its outlook for 2003 to reflect the acquisitions, forecasting earnings of 60 to 70 cents per share on consolidated revenue of more than $1 billion. Eight analysts polled by Thomson First Call were looking for a profit of 91 cents per share in the period. The stock plumbed a 52-week low of $14.68 earlier in the session.

Stewart Enterprises'
STEI, +0.00%
shares fell more than 8 percent. During Monday's session, the Metairie, La., cemetery and funeral home operator lowered its outlook for fiscal 2003 to reflect decreased deaths nationwide. The company now sees earnings of 9 cents per share for the first quarter, at the low end of its previously disclosed estimate, and a profit of 30 to 35 cents per share for the full year, well below its prior projection for earnings of 40 to 43 cents per share in the period. The stock lost more than 20 percent on Monday.

VaxGen
VXGN
sank almost 17 percent, extending its roughly 47 decline on Monday after the company said that initial results of a large-scale Phase III trial of its Aidsvax vaccine did not meet its primary endpoint. The company was aiming for a statistically significant reduction in HIV infection within the study population as a whole.

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